IIX announces successful close of seed capital investment in BagoSphere, led by Small World Group Incubator

Impact Investment Exchange Asia (IIX) announced today that it successfully facilitated the seed capital round of funding for BagoSphere Pte. Ltd, a pioneering vocational training social enterprise that provides affordable and effective training programs catered to rural, low-income youths in the Philippines. The transaction closed through IIX’s Impact Incubator and Impact Partners platforms with four strategic investors. Law firm Clifford Chance provided pro bono legal support to BagoSphere for the transaction. The investment comes in the form of a convertible note and will fund start up costs and the establishment and operation of a training center in Bago City, Philippines.

BagoSphere is a vocational training social enterprise that provides affordable and effective training programs specifically catered to rural, low-income youth between the ages of 18 and 35 living near and at the base of the pyramid. The company targets training for call center jobs in the Business Process Outsourcing (BPO) market. The Filipino BPO industry has grown by 24% year-on-year and Bacolod City currently ranks 3rd on the list of emerging centers. BagoSphere was co-founded by Zhihan Lee, Ivan Lau and Ellwyn Tan. The triumvirate completed a pilot program in Bago City, near Bacolod City, Philippines in 2011, in which 90% of its graduates successfully landed a job at a call center, 64% are still in employment, and 14% of the graduates since have been promoted. Through stable skilled employment, graduates are able to earn a salary four-times higher than that of unskilled work, raising themselves and their families above the national poverty threshold.

“I am excited to have four strong investors join BagoSphere in its mission to improve the livelihoods of rural youths and support our organization in the strategy and discipline of running a financially sustainable social enterprise. I have been impressed with the quality of professionals at IIX and the strength of their ecosystem partners, such as Clifford Chance, who collectively have guided BagoSphere step-by-step through the capital raising process.” Zhihan Lee, Co-founder and CEO.

BagoSphere delivers an eight-times higher pass rate than existing training courses and provides increased access for rural youths through a deferred payment scheme. It earns revenues through a commission from the employer upon job placement and a train-first-pay-later tuition fee from each student via affordable monthly installments. BagoSphere attributes its success to its superior results-oriented training curriculum that teaches job skills, life skills and financial literacy to support students in improving their livelihoods; long term partnership with the local government; and mutually beneficial partnerships with stakeholders such as call centers, and experienced Singaporean and Filipino advisers.

The transaction was led by Small World Group Incubator (SWGI), a Singapore-based incubator that provides seed funding and mentoring to help start and grow small companies. SWGI has partnered with IIX to provide funding and mentorship to social enterprises seeking seed stage capital. SWGI was joined in the investment by three other investors.

“Small World Group looks forward to its partnership with the BagoSphere team in expanding their efforts to raise rural youths out of poverty through a for-profit social enterprise model. I congratulate the team and thank IIX for managing this transaction in such a professional and efficient manner. We are proud to partner with IIX in their Impact Incubator program.” Frank Levinson, Partner, SWGI.

IIX identified BagoSphere as a social enterprise with high potential to create positive social impact at scale and worked with the management team to become investment-ready and prepare for investor pitches. IIX hosted BagoSphere at its Impact Forum 2012, providing the company an opportunity to present to accredited investors at its Social Enterprise Showcase, and introduced the company to the investor base of its Impact Partners platform. IIX led the transaction process and secured strategic investors ranging from a Filipino social enterprise incubator to an education-focused Singapore philanthropist. IIX and its sister non-profit organization, Shujog, helped BagoSphere create a social impact framework for measuring their impact and embedding their mission in their management metrics.

“IIX is pleased to have assisted BagoSphere in raising investment capital which will allow it to scale up its successful pilot program and expand the impact of its activities. IIX is particularly pleased to have been able to help BagoSphere prepare to meet investors and to have been able to connect the company with investors from its Impact Incubator and Impact Partners platform. We are also thrilled that we have been able to work with Shujog to put in place a social impact framework and assessment methodology and monitoring framework which will help management ensure that the company is achieving its social objectives.” Robert Kraybill, Managing Director of IIX.

About IIX:
IIX is revolutionizing the way the world looks at sustainable economic development in Asia through the creation of social capital markets. It is creating the platforms, products and ecosystem development to connect socially and environmentally mission-driven enterprises with impact investors. IIX operates Impact Incubator and Impact Partners, Asia’s first private platforms dedicated to promoting impact investments in Asian social enterprises. IIX is expected to launch its public investment platform, Impact Exchange, by December 2012 providing liquidity and transparency to investors in Asian social enterprises.

About BagoSphere:
BagoSphere is the recipient of Singapore International Foundation’s Young Social Entrepreneurs Grant Program sponsored by Asia Philanthropic Ventures and an award winner of Start-up@Singapore’s Social Enterprise competition. BagoSphere is also incubated by Grameen Creative Labs @ National University of Singapore (NUS).

Contact Information:
For transaction inquiries, please email us at info@asiaiix.com.